India’s industrial production growth hit a five-month high of 7.1% in November. File | Photo credit: Kamal Narang
India’s industrial production rebounded to rise 7.1% in November 2022, after falling 4.2% in October 2022 according to revised estimates.
The rise was helped by base effects, as November 2021 had only seen 1% growth, but also marked a 6% rise in production levels compared to October 22, which incidentally registered the lowest level of the Industrial Production Index (IPI) since November 2021.
After falling nearly 6% in October, manufacturing output improved to grow 6.1% from November 2021 and 6.55% from October 2022 levels.
Mining output growth accelerated from 2.5% in October to 9.7% in November. Electricity production increased by 12.7% in November, compared to only 1.2% year-on-year growth in October 2022, but total production was 1.5% lower than the previous month.
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Classified by end use, production increased for all six subsectors for the first time since June 2022, compared to just two sectors in October. Production of non-durable consumer goods rose 8.9% in November after four months of contraction, with production hitting its highest level since December 2021.
Production of durable consumer goods rebounded to growth of 5.1% after three months of contraction, but was boosted by the base effect of a 5.7% decline in November 2021. Capital goods , which had contracted 1.7% in October, rebounded 20.7% in November and were 11.1%. higher from month to month.
Despite the encouraging figures from the IIP, economists at India Ratings and Research said the resumption of factory production still had a long way to go and would require more policy support. “Even now, production levels of intermediate goods and durable consumer goods are below pre-COVID levels,” Sunil Kumar Sinha and Paras Jasrai said.
Infrastructure and construction goods rose 12.8%, with the highest production since March 2022. Intermediate goods rebounded from a contraction in October to grow 3% in November, while production of goods primary increased by 4.7%.
CIFAR Chief Economist Aditi Nayar expects PII growth to be moderate to “low single digits” for December, in line with slowing growth in most high-frequency indicators available for the month, compared to November levels.
Seven of the 23 different manufacturing sectors tracked for the Industrial Production Index (IIP) recorded negative growth, led by clothing (-11.7%), coke and refined petroleum products (-9.8%) ) and textiles (-9%).
Among the others, nine sectors recorded growth of close to 10% or more, including other transport equipment (24%), motor vehicles (22.2%), recorded media printing (22.1% ) and machinery and equipment (up 20.8%).